Home Market Market Watch Closing Comments

Closing Comments


cid:<a href=image009.jpg@01CE6CE4.660D8B30“>


Closing Comments


Corn, along with all the grains, traded both sides of unchanged, – ¼ (Dec). Weekly corn inspections for the week ending October 5th were well below expectations, coming in at 524,168 MT vs. estimates of 750K MT. South Korea bought 320K MT today of optional origin corn, thought to be going Brazil’s direction, as they have a $5-10/MT advantage over the U.S. PNW bids. Brazil’s CONAB came out with their first estimate showing corn production at 92.2-93.6 MMT compared to 98.5 MMT last season. Managed money positions have stayed fairly steady, around 175K contracts short, as traders anxiously await the Thursday USDA report. In South American weather, Brazil is hot and dry but recent rains have helped while Argentina is expecting more sunshine, which will help with planting.


Soybeans continued their sideways trade, consolidating in a narrow range ahead of the Report, – ¾ (Nov). USDA weekly inspections provided support for beans, with a whopping 1.484 MMT announced compared to estimates of 1.1 MMT. China also was on the board this morning for another purchase of 131K MT, after a quiet few days. Brazil’s CONAB’s first stab at soybean estimates for the coming season showed production at 106-108.2 MMT compared to 114 MMT last year. This is due to expectations of more normal production after last year’s record, with acres expanding by 2.7%. The concern in Brazil is over delayed planting in the center and north due to dry conditions, which could play out with double crop corn pollinating in the hottest part of the summer, if delays persist.


Wheat saw mixed trade, finding some support in Egyptian demand, a weak Dollar and rising crude prices. Wheat weekly inspections were a disappointing 350,632 MT compared to estimates of 550K MT. Russia was able to garner in another Egyptian order, with the GASC announcing a purchase of 170K MT of Russian origin wheat at tender today. The USDA report on Thursday will be focused more heavily on corn and beans, so expect wheat to follow their direction. Chicago SRW – ¾, Kansas City HRW + ½ and Minneapolis HRS -6 (Dec).


Live Cattle futures pushed to new heights, finding support from strong domestic demand, a strong export pace and recently huge profit margins from packers, according to Hightower. The beef market is at its highest level since August 15th, with the USDA boxed cut-out to $198.13, ninety-one cents higher than the previous close. Dec Cattle +1.875


Hogs followed the lead of cattle and forged out gains, +.600 (Dec). Even though technical action is poor, cash and pork values are up. The USDA pork cut-out was up 90 cents to $72.82, higher than last week’s $72.33. Look to see if the market can continue at this pace in spite of the large discount of cash to futures and with growing supplies. October is National Pork Month.


Closing Market Snapshot  


All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.

or 1-866-249-2528